Agreement to not "cold call" drove down wages; settlement said to be $324M.

A class-action lawsuit against Google, Apple, Adobe, and Intel over how they recruited employees was scheduled to go to a jury trial at the end of next month. But it's not going to happen. Court papers filed today indicate that the case has been settled. Reuters reports that the total settlement sum, which is still not in public court papers, will be $324 million.

A New York Times report on this case, published Sunday, suggested that the parties were nearing settlement. That's no surprise considering how potentially embarrassing a jury trial could have been for all of these companies.

The lawsuit had already made e-mails between Steve Jobs and Google executives about the agreements public, and more information would have surely come out. Jobs in particular may not have looked good at trial. "If you hire a single one of these people, that means war," Jobs emailed Sergey Brin, as the Times noted in its post on today's settlement.

The dispute stems from a deal between several large tech companies to not "cold call" competitors' employees in order to recruit them. The Justice Department busted all the companies involved back in 2010, and the companies agreed to halt the practice. By agreeing to not compete for each others' employees, the companies had formed a kind of anticompetitive cabal that kept engineers' wages down.

Complying with the government demand did not mollify all of the affected workers, however. A class-action antitrust lawsuit was filed to compensate the engineers, who argued that the agreement had pushed down wages. Despite the companies' best efforts to avoid a class action, US District Judge Lucy Koh certified the class.

There were more than 60,000 workers in the class. Class members claimed that the "no cold calls" agreement resulted in $3 billion of lost wages, a far cry from the settlement agreement.

Pre-trial jockeying in the case included motions over how Jobs could be portrayed by plaintiffs' lawyers. Jobs' role included threatening Palm with a patent lawsuit when it wouldn't agree to the no-poaching scheme.

The plaintiffs' case took a disturbing turn when one of the five named plaintiffs, 43-year-old programmer Brandon Marshall, died under disturbing circumstances. According to the Times story, Marshall was shot and killed by a Santa Clara County sheriff's deputy in December after he attacked the deputy with a five-inch metal spike. The deputies were responding to calls about "a distressed man who appeared possibly suicidal," wrote the Times.

The settlement "is an excellent resolution of the case that will benefit class members," said Kelly Dermody, co-lead counsel for the plaintiffs. "We look forward to presenting it to the court and making the terms available."

Lucasfilm, Intuit, and Pixar were also defendants in the original lawsuit, but those companies settled even before a class was formed. The companies will pay $20 million between them. Only 8 percent of the class members worked at those three companies.

The class agreeing to settle on Thursday consists of "all natural persons who work in the technical, creative, and/or research and development fields that are employed on a salaried basis in the United States by one or more of the following: (a) Apple from March 2005 through December 2009; (b) Adobe from May 2005 through December 2009; (c) Google from March 2005 through December 2009; (d) Intel from March 2005 through December 2009; (e) Intuit from June 2007 through December 2009; (f) Lucasfilm from January 2005 through December 2009; or (g) Pixar from January 2005 through December 2009."

Retail employees, senior executives, corporate officers, and board members are all excluded from the class.

The lawsuit had already made e-mails between Steve Jobs and Google executives about the agreements public, and more information would have surely come out. Jobs in particular may not have looked good at trial. "If you hire a single one of these people, that means war," Jobs emailed Brin, as the NYT noted in its post on today's settlement.

How is this surprising ?

Steve Jobs is reknowned for bully-tactics sicne the start of his career. This is common knowledge and anyone shocked that he was still applying these methods as he progressed is naíve. This was never out of character for Jobs and wouldn't have made him look any better or worse than folks already know.

The lawsuit had already made e-mails between Steve Jobs and Google executives about the agreements public, and more information would have surely come out. Jobs in particular may not have looked good at trial. "If you hire a single one of these people, that means war," Jobs emailed Brin, as the NYT noted in its post on today's settlement.

How is this surprising ?

Steve Jobs is reknowned for bully-tactics sicne the start of his career. This is common knowledge and anyone shocked that he was still applying these methods as he progressed is naíve. This was never out of character for Jobs and wouldn't have made him look any better or worse than folks already know.

Geez Joe - you know better.

I think in the nation at large, there are still many more view Jobs positively rather than negatively. (No, that's not 'fanboy' anything, that's just my assessment of where we're at culturally.)

The point is, headlines about Jobs getting on the phone and cutting secret deals to keep his workers' wages down are not headlines Apple PR wants to see in Small Town Newspaper, USA.

Similar for the other companies. It isn't just about Jobs, he's just the highest profile of all the personalities involved. Cook and Brin and many others were deposed. There was a lot for the tech companies to lose in this case in terms of image.

While this settlement compensates directly affected people, the collusion also indirectly harmed others, by reducing the market wage generally. An engineer at a non-colluding firm got less because when he went to his boss and said "see what they're paying at X, you should pay me that", the comparison wage had been illegally reduced.

The lawsuit had already made e-mails between Steve Jobs and Google executives about the agreements public, and more information would have surely come out. Jobs in particular may not have looked good at trial. "If you hire a single one of these people, that means war," Jobs emailed Brin, as the NYT noted in its post on today's settlement.

How is this surprising ?

Steve Jobs is reknowned for bully-tactics sicne the start of his career. This is common knowledge and anyone shocked that he was still applying these methods as he progressed is naíve. This was never out of character for Jobs and wouldn't have made him look any better or worse than folks already know.

Geez Joe - you know better.

I think in the nation at large, there are still many more view Jobs positively rather than negatively. (No, that's not 'fanboy' anything, that's just my assessment of where we're at culturally.)

The point is, headlines about Jobs getting on the phone and cutting secret deals to keep his workers' wages down are not headlines Apple PR wants to see in Small Town Newspaper, USA.

Similar for the other companies. It isn't just about Jobs, he's just the highest profile of all the personalities involved. Cook and Brin and many others were deposed. There was a lot for the tech companies to lose in this case in terms of image.

I still view him positively. You do not have to be a nice guy to do great things. Or even be a valuable human being. Being nice is overrated.

Btw. If we had had this surround surveillance earlier - ghandi let his wife suffer but took medical care himself- ghandi also slept in the same bed with young girls to "test his restraint" - yeah sure- Martin Luther King was a womanizer- mother Theresa was a cruel woman

And so on. Jobs is a saint in comparison. He yelled at people boo fucking woo. Seems to sometimes gets things done. If you scream AND are ignorant then it becomes different.

The difference is that Jobs was a scumbag in his public life. The above allegations make him an extortionist and thief.

lololololololwho are you, Scrooge McDuck? not worth it unless it finances a brand new money vault large enough for money-swimming??oh, the laughinganyway, we'll see how much we all get- I'm a member of the class, worked in IT at Lucasfilm from 2007-11.

The lawsuit had already made e-mails between Steve Jobs and Google executives about the agreements public, and more information would have surely come out. Jobs in particular may not have looked good at trial. "If you hire a single one of these people, that means war," Jobs emailed Brin, as the NYT noted in its post on today's settlement.

How is this surprising ?

Steve Jobs is reknowned for bully-tactics sicne the start of his career. This is common knowledge and anyone shocked that he was still applying these methods as he progressed is naíve. This was never out of character for Jobs and wouldn't have made him look any better or worse than folks already know.

Geez Joe - you know better.

I think in the nation at large, there are still many more view Jobs positively rather than negatively. (No, that's not 'fanboy' anything, that's just my assessment of where we're at culturally.)

The point is, headlines about Jobs getting on the phone and cutting secret deals to keep his workers' wages down are not headlines Apple PR wants to see in Small Town Newspaper, USA.

Similar for the other companies. It isn't just about Jobs, he's just the highest profile of all the personalities involved. Cook and Brin and many others were deposed. There was a lot for the tech companies to lose in this case in terms of image.

So true, much of society sees Jobs as this virtuous engineer and designer who was able to lead a company to the top. Jobs did great things, yes, but almost everything he griped about he was a party to at one point or another. His first entrepreneurial endeavor was a device that was used to steal long distance phone calls. When he got to the top he whined about piracy, and called his competitors thieves. His way of doing things worked very well for him but I think our cultural opinion of him as a whole is a little skewed for sure. I think its probably in Apple's best interest to keep it that way but thats just my 2 cents.

$324MM is a windfall for the legal team and a severe underpayment for star engineers who were denied promotions or pay raises. A 5% raise on just $100K is $5K in the first year alone, yet this settlement for the entire period is just $5K/head.

So, how long before we learn that the companies involved obtained the details of exactly which possible class members went through the processing of claiming, in order to add them to the 'not a team player' list?

Hopefully the sheer size of the class will help mitigate that; but it certainly seems to be the rule in individual employment related lawsuits that even a complete victory and proof of egregious misconduct often leave the employee more or less radioactive as far as future options in the field...

Such scumbags... they know that a trial over this would result in gigantic changes in our economy. They set the standard that even if technology improves your companies profit by 500%, you keep wages low and never give raises more than 10%. They divorced the amount people were paid from the value of the work they performed. Now salaries are so ridiculously behind in the technology sector, any catching up would just look silly or crazy. 75% raises? Yes, technology workers deserve them. Between 1950 and 1980, the average salary of the lower 90% of the economy went up by 75%. Between 1980 and 2010, it went up by 1%. And 1980-2010 just happens to be when computers came into the workplace and multiplied productivity over and over. It didn't let people do 5% more, it let them do 5x as much. Instead of benefitting everyone, it benefitted exclusively the corporations and their owners/shareholders.

Doesn't it seem unusual that a person who can create software to replace 10 employees is paid less than what 2 of them would cost?

So, how long before we learn that the companies involved obtained the details of exactly which possible class members went through the processing of claiming, in order to add them to the 'not a team player' list?

Hopefully the sheer size of the class will help mitigate that; but it certainly seems to be the rule in individual employment related lawsuits that even a complete victory and proof of egregious misconduct often leave the employee more or less radioactive as far as future options in the field...

Ordinarily, in the case of an employment class action, there is no claim process for the employee to initiate. The court obtains the employment data from the employer, determines which employees fit the criteria, and mails a check to them. At least, that's how it worked in the one that was brought against my employer.

So about $50,000 per employee assuming the lawyers get nothing. But they do so ... not particularly worth it?

What makes it worse than simply overpaid lawyers is that their take basically shafts the employees who actually desrve the ahrd earned money that the overpaid lawyers are going to dip into.

In the first-round settlement the lawyers got 25% of the $20 million. I imagine the percentages will probably be similar this time.

Why the hell would lawyers get 25% of the payout? Who would agree to that? The idea of having lawyers get a cut of the settlement makes sense, because you want them to work hard to push the final price up, but when they get 25% they'd be over the moon with a payout over $100 million, let alone $324 million. If they only received 1% of the payout, the $3 billion they estimated the engineers were owed would have been fought for a lot harder...

I'm surprised a lot of people complain about lawyers getting the best part of the deal. Isn't it a commonly known fact that class action suits are almost always a win for the lawyers, and the actual class gets very little?

So about $50,000 per employee assuming the lawyers get nothing. But they do so ... not particularly worth it?

What makes it worse than simply overpaid lawyers is that their take basically shafts the employees who actually desrve the ahrd earned money that the overpaid lawyers are going to dip into.

In the first-round settlement the lawyers got 25% of the $20 million. I imagine the percentages will probably be similar this time.

Why the hell would lawyers get 25% of the payout? Who would agree to that? The idea of having lawyers get a cut of the settlement makes sense, because you want them to work hard to push the final price up, but when they get 25% they'd be over the moon with a payout over $100 million, let alone $324 million. If they only received 1% of the payout, the $3 billion they estimated the engineers were owed would have been fought for a lot harder...

I want you to build another Ars Technica-like site for me. Equivalent graphics, forums, content management system, advertising system, administration, servers, communications infrastructure, the works. In exchange, I'll give you 10% of the revenue -- when the revenue starts coming in. Everything comes out of your pocket until we get revenue. Oh, and by the way, if you screw up the site I will sue you for the money that I should have made, and potentially make it so that you can't engage in any similar work for anywhere between 6 months and the rest of your life.

Better yet, I'll only give you 1% of the revenue. Logically you'll work much harder to ensure that I make more revenue, right?

BTW: Conde Nast will be paying a team of guys anywhere between $300/hr/head and $800/hr/head to interrogate you, inspect 90% of everything you generate, and attempt to break the new site. The whole time. You will talk to them. Frequently. Or else.

So about $50,000 per employee assuming the lawyers get nothing. But they do so ... not particularly worth it?

Yeah, if I got a $25K or $35K settlement for something like this, I'd probably not even bother to claim it. I mean, what would I even do with chump change like that?

$35k will never wash off the feeling that you traded your most basic, fundamental human right in exchange for a small settlement. most of these engineers are not hurting for their basic survival needs.

if the companies do this with high payed white collars, imagine what tomorrow McDonalds and Wendy's will do to people making $7.50 an hour. it would be a permanent sort of enforced system of wage slavery, with a vast underclass never able to climb out of an extremely basic subsistence lifestyle with a massive debt load. not exactly what the founding fathers had in mind.

So about $50,000 per employee assuming the lawyers get nothing. But they do so ... not particularly worth it?

What makes it worse than simply overpaid lawyers is that their take basically shafts the employees who actually desrve the ahrd earned money that the overpaid lawyers are going to dip into.

In the first-round settlement the lawyers got 25% of the $20 million. I imagine the percentages will probably be similar this time.

Why the hell would lawyers get 25% of the payout? Who would agree to that? The idea of having lawyers get a cut of the settlement makes sense, because you want them to work hard to push the final price up, but when they get 25% they'd be over the moon with a payout over $100 million, let alone $324 million. If they only received 1% of the payout, the $3 billion they estimated the engineers were owed would have been fought for a lot harder...

That's typical or even low for class-action suits. This is why there is a race to file the first case when an opportunity like this crops up. The payoffs are so outrageous for the lawyers, and the first lawyers to get a case filed have a good chance of taking the lead when it's consolidated to a class action.

A reasonable point was made that the lawyers are taking risks in filing, but we're talking about $81 million dollars here. That's well beyond what's needed to balance out those risks.

Engineers are typically not going to switch jobs just for a $5,000 raise, it's not even worth it. You'd lose a lot more than that just from canceled restricted stock and options. So that being the average payout (not even including the lawyer fees) is absurd.

On the value of lawyers and class action law suits. I hate lawyers. But lets keep some things in mind:

1. Class action lawsuits are not guaranteed, I would say probably 50-50 at best.

2. It is a huge amount of work to document all the parties in a class action lawsuit. The law firm probably has to hire out help for the entire length of the trial.

3. While taking on a class action suit, the lawyers are not doing much else that brings in pay.

4. If they lose, they get nothing. So its a big risk.

5. Class action lawsuits usually revolve around a group that has been mistreated. Often, not always, but often it revolves around medical issues, deaths, or such and may be the only way these people see justice. As such, we want to make sure that it is lucrative enough that lawyers are willing to take on the risks and provide this service to their clients. Especially those who couldn't pay otherwise.

$324MM is a windfall for the legal team and a severe underpayment for star engineers who were denied promotions or pay raises.

As a not-quite-star engineer at Google I have to say this whole thing has always struck me as silly. Maybe we weren't getting cold calls from Apple or Adobe - I wasn't anyway - but we certainly got them from almost everyone else. Facebook, LinkedIn, endless social network, online advertising, and big data startups, .... And if I'd wanted to get in at one of the other companies in this suit, I could have contacted them rather than waiting for a call. (I have no idea if I'd have gotten hired, of course.)

I don't know any Google engineers who are very unhappy about their salary. More is better, sure, but they're pretty generous. My jaw has dropped at the size of raises and bonuses a couple times. But it may be different for folks who aren't stars, or at the other companies. Google is trying to be different; we try to find really top-rate people and pay them accordingly.

I'm not saying it was OK to have these non-poaching agreements -- it wasn't. I just doubt they really had much of an impact, at least on top-flight engineers.

I wonder if the settlement will be pro-rated to the time period the particular employee was with the company in question during that time period. I was with Apple for one of those four years; does that mean I'll have a fat $937.50 check ($5000/4 - 25% for the lawyers) popping up in the mail one day?

Edit: after looking into it, apparently I needed to have been sent and then filled out a claim form by March 19th. Ah well. Apparently the lawyers did a crappy job of tracking down members of the class action (I still live at the same address which was a part of my Apple HR records, and have the same mobile phone number, etc)!